Nidec (6594) Q2 2026 earnings summary

Executive summary

• Net sales for the first half of fiscal 2025 reached ¥1,302.3 billion, up 0.7% year-over-year, but Q1 FY2025 net sales were ¥638,026 million, down 1.6% year-over-year and 3.6% sequentially.

• Operating profit dropped sharply by 82.5% year-over-year to ¥21.1 billion, with Q1 FY2025 showing an operating loss of ¥26,407 million due to large provisions, impairments, and supplier settlements.

• Ongoing investigations into inappropriate accounting practices have led to a Security on Special Alert designation by the Tokyo Stock Exchange and a disclaimer of opinion from auditors.

• Management is implementing comprehensive corporate reforms, including compliance and cultural changes, and has established a Corporate Reform Committee and a Third-Party Committee.

• Cash generation remains strong, with net cash from operating activities at ¥112.3 billion and free cash flow at ¥45.2 billion for the first half.

Financial highlights

• Operating profit margin fell to 1.6% from 9.3% year-over-year, and operating margin in Q1 FY2025 dropped to -4.1% from 9.3% a year ago.

• Profit before income taxes decreased 69.6% to ¥30.3 billion; profit attributable to owners of the parent fell 58.6% to ¥31.2 billion, with Q1 FY2025 net loss attributable to owners at ¥9,383 million.

• Major losses include ¥36.5 billion for inverter contract loss, ¥19.5 billion for fixed asset impairment, and ¥13 billion for supplier settlements.

• EPS declined 58.5% year-over-year to ¥27.21; Q1 FY2025 EPS (basic) was -¥8.19.

• Free cash flow for the first half was ¥45.2 billion, up ¥17.2 billion year-over-year.

Outlook and guidance

• No interim or full-year dividend outlook due to inability to fix dividend amounts; year-end dividend and full-year earnings guidance remain undetermined.

• Ongoing investigations and corrective measures may lead to further revisions of financial information and retroactive amendments to past financial statements.

• Medium-term plan "Conversion 2027" aims to shift to a high-profit structure, five business pillars, and a global system.